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Nigeria’s FX increases by 4.06%, hits $34.14 billion in June

Published

2 days ago

June 30, 2024

Nigeria’s reserves have increased steadily, reaching $34.14 billion on Friday after increasing by 4.06% from $32.74 billion on June 3, 2024, according to figures released by the Central Bank of Nigeria.

To support the nation’s energy distribution industry, the government obtained a $500 million loan from the World Bank, as revealed by the Bureau of Public Enterprises in May. The World Bank also disclosed that the nation would get $2.25 billion in assistance to stabilize the economy. The most recent loan rounds increased the nation’s reserves that the World Bank provided to the Federal Government.

“This combined $2.25bn package provides immediate financial and technical support to Nigeria’s urgent efforts to stabilise the economy and scale up support to the poor and most economically at risk. It further supports Nigeria’s ambitious, multi-year effort to raise non-oil revenues and safeguard oil revenues to promote fiscal sustainability and provide sufficient resources to deliver quality public services.” The multilateral lender stated in a statement.

As a result, in just one month, the external reserves have increased by nearly $1 billion. Due to the nation’s dollar shortfall last year, the central bank was compelled to flog the naira to boost foreign cash inflow.

Following that, the local currency lost approximately 300% of its value in a year, closing at 1,514.31/$ on Friday at the Nigerian Autonomous Foreign Exchange market.

In the first half of 2024, the naira was the world’s worst-performing currency, according to a Bloomberg analysis released on Friday. It stated that the Central Bank of Nigeria’s attempts to fortify the currency had been hampered by devaluation, a lack of dollar liquidity, and market volatility.

Other than the naira, the world’s poorest-performing currencies in the first half of the year were the pound in Egypt and the cedi in Ghana.

“The naira’s performance is the worst among global currencies tracked by Bloomberg beside that of the pound in Lebanon, which is undergoing an economic crisis and witnessing dollarisation,” the report noted.

Olayemi Cardoso, the governor of the CBN, said that the central bank was “relatively pleased” with the strides achieved in stabilizing the value of the local currency.

“I do believe that we have more or less seen the worst volatility,” Cardoso told Bloomberg TV.

“The losing streak is the longest since July 2017 and takes the decline since the start of the year to 40 per cent.

To increase the quantity of dollars in the nation and stabilize the value of the local currency, the central bank has implemented several measures. International Money Transfer Operators now have access to the official window for selling foreign exchange, the apex bank stated last week.

The central bank stated in a circular that was signed by Dr W.J. Kanya, the acting director of the Trade and Exchange Department, that the action would allow IMTOs to get naira liquidity through the official window, facilitating the prompt settlement of remittances from the diaspora.

Related Topics:Featured FX Naira Nigeria

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Kenya to allow duty-free imports from EU after latest trade agreement

Published

3 hours ago

July 2, 2024

Ifeoluwa Dada

After ten years of talks, Kenya and the EU have finally implemented a trade agreement, allowing tax-free goods from the 27-member union to enter its domestic market after 25 years.

The EU-Kenya Economic Partnership Agreement (EPA) went into effect on Monday, according to Kenya’s Cabinet Secretary for Investment, Trade, and Industry, Rebecca Miano. The agreement maintains unimpeded access for Kenyan commodities to the European Union, except weaponry.

“The EU-Kenya EPA is one of the most ambitious agreements negotiated between the European Union and an African country in terms of promoting economic sustainability. It can serve as a template for other African countries, particularly those in Eastern Africa to adapt,” Ms Miano said in a statement.

“The agreement includes trade, economic and development cooperation and a chapter on trade and sustainable development which covers provisions on labour issues, gender equality, forestry and environment and the fight against climate change.”

Kenya’s mostly agricultural products, including fruits, vegetables, cut flowers, tea, and coffee, will continue to be able to enter the EU market duty-and quota-free thanks to the agreement, which is the first trade agreement between the bloc and a developing nation.

The agreement guarantees Kenya’s primarily agricultural products, including vegetables, cut flowers, fruits, tea, and coffee, to continue entering the bloc duty-and quota-free. It is the first trade agreement between the EU bloc and a developing nation.

Conversely, Nairobi has promised to liberalize trade after 25 years by progressively lowering import duties from Europe. This implies that mechanical, mineral, and chemical items coming from Europe would not be subject to duties, and EU investments will also receive incentives.

However, the EPA agreement contains protectionist language that prevents the EU from providing broad subsidies for Kenyan agricultural exports until there is a more in-depth policy discussion with Nairobi. The purpose of this section is to protect Kenya’s agriculture and food security from unfair competition from the European Union.

The EU benefits from trade with Kenya, as it imports Ksh150.08 billion ($1.2 billion) and sells items worth Ksh223.12 billion ($1.7 billion) to Kenya. Following the European Parliament’s approval on February 29, heads of state and government can now finalize the ratification procedure, bringing the EU-Kenya EPA into force.

A total of 366 members of the European Union voted in favour of the agreement, 86 against it, and 56 abstained. The document needed approval from Kenyan MPs in order to be put into effect.

The wording of the EU-East African Community agreement, which was previously signed in October 2014 and is currently blocked for approval by the individual parliaments, is extensively modified in this document. The introduction of provisions addressing climate change is the primary modification.

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IMF raises Zambia’s debt to $1.7 billion, approves $570 million installment

Published

5 days ago

June 27, 2024

Ifeoluwa Dada

The Extended Credit Facility for Zambia has undergone a third assessment, and the International Monetary Fund (IMF) has announced that its executive board has approved the immediate disbursement of about $569.6 million.

The Fund’s board also approved a request to boost funding from $1.3 billion to $1.7 billion to assist the nation of southern Africa in dealing with a severe drought that has impacted electricity generation and resulted in agricultural losses.

IMF representative, Antoinette Sayeh stated in a statement that while tackling humanitarian issues brought on by the drought, Zambian authorities have achieved progress on structural and economic reforms.

“Going ahead, coordinated macroeconomic policies, continued efforts to restore fiscal and debt sustainability, and consistent reform implementation would be key to addressing the impact of the drought, preserving macroeconomic stability, and bolstering growth,” said Sayeh, the Fund’s deputy managing director.

Rich in copper After a debt restructuring procedure that lasted more than three and a half years, Zambia managed to pull itself out of default this month. The experience served as a lesson for the G20’s Common Framework mechanism, which is intended to assist low-income nations in addressing unmanageable debt loads.

Extended debt restructuring has hindered investment, limited economic expansion, and put a strain on regional financial systems.

To assist pay off external debt and deal with the drought, Zambia’s finance minister requested last week that the parliament authorize an additional 41.9 billion kwacha, or $1.65 billion, in spending.

On the slopes of the magnificent, active Mount Bromo, the Tenggerese people of Indonesia have been performing an age-old ceremony for decades.